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Daily Real Estate News | May 5, 2009 | Bank Demolishes Foreclosed New Homes
The financially troubled Guaranty Bank of Austin, Texas, demolished 16 new and partially built California homes acquired in a foreclosure rather than try to sell them.

The housing tract in Victorville, Calif., about 85 miles from Los Angeles, had been taken over by vagrants who painted graffiti on the walls and littered the ground with drug paraphernalia.

The homes were built two years ago in an area where new homes sell for a media price of $265,990, according to Hanley Wood Market Intelligence, a housing research firm.

Demolition was estimated to cost $100,000 while finishing the properties would have cost at least $1 million, according to a Guaranty Bank official.

U.S. federal regulators analyzing bank stress tests are projecting losses of up to 12 percent on commercial real-estate loans over the next two years.

The Wall Street Journal, Michael Corkery (05/05/2009)